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Former Sarasota Realtor Seaborne sentenced to 5 years

Published: Thursday, January 24, 2013 at 10:42 a.m.

Last Modified: Thursday, January 24, 2013 at 3:10 p.m.

SARASOTA - Unmoved by Arthur Seaborne’s age, his health concerns or the culture of corruption during the real estate boom, a federal judge sentenced the 70-year-old former mortgage broker to five years in prison.

It was the maximum sentence allowable under court guidelines.

U.S. District Court Judge Steven D. Merryday said he reached the decision because Seaborne’s crimes against financial institutions and investors who attended his real estate seminars were “particularly cold-blooded.”

“You are a person — like many others I have seen — who is well-regulated in many areas of your life,” Merryday told Seaborne. “But in one area of your life you went terribly and unaccountably wrong, and you visited unconscionable injury on a quite a few of people.”

Charged with luring investors into a “no money down” home buying scheme and lying to federally insured lenders on loan applications, Seaborne became choked with tears when it was his turn to address the court.

“I’m truly, truly sorry for my actions,” he said.

Seaborne — one of the real estate professionals featured in 2009 Herald-Tribune investigation of property flipping — is one of nearly 30 real estate investors and professionals from Southwest Florida who have been sentenced to prison for crimes committed during the real estate boom.

His sentance was also one of the longest.

Only Rich Bobka — the chief lieutenant in a decade-long flipping fraud scheme masterminded by R. Craig Adams — and Bobka’s brother, George Cavallo, have received longer sentences.

During Seaborne’s Thursday morning hearing, his court-appointed attorney, Stephen Baer, tried to get his client’s sentence reduced to three and a half years.

But federal prosecutors and two of Seaborne’s victims objected to any reduction.

“I represent just one of the single, widowed and divorced women who were cheated and robbed of their nest eggs and led astray by Mr. Seaborne,” said Martha Huie, a Sarasota resident who invested with Seaborne during the boom. “He was the beginning of many sleepless nights and eroded finances for these people. Three and a half years is absurd for what he has done.”

“My mother suffered from a disease of the lower cortex of the brain — a semi-dementia,” Winer said. “She invested $70,000 to $100,000 with him and passed away in April because of the lost income. What he did caused her to go on welfare and Medicaid. She lost her home and her car. She did not live a very good life after she lost her life’s savings.”

The Herald-Tribune’s 2009 investigation found that Seaborne went out of his way to market his real estate investment program to women.

He told them he would buy houses in their names for no money down and take care of all the upkeep and expenses. They would get part of the rent money and share in the property’s appreciation over time.

But when the economy turned, Seaborne stopped making the promised payments, forcing more than 30 of his investors to default on nearly $7 million in loans.

Seaborne’s attorney tried to argue that a culture of corruption in the mortgage industry during the boom made it easy for his client to break the law.

Sales forces at banks “routinely used inflated and unverified borrower incomes and job titles to obtain approval of loans which borrowers actually did not qualify for and could not afford to repay,” Baer said in his sentencing memorandum.

But Merryday said the environment surrounding Seaborne’s actions was not a legitimate argument for reducing his sentence.

“Just because other people are doing it is not a mitigating factor,” Merryday said. “If there was a misunderstanding about what the law said, that might be a mitigating factor. But the presence of others willing and able to commit fraud is just irrelevant. That sort of thing should cause us to question the health of our community.”

Merryday also dismissed Baer’s argument that Seaborne should get his sentence reduced because there is a low rate of recidivism among 70-year-olds.

Maybe for drug dealers and burglars, Merryday said. But not for people who commit fraud.

“I think you’ll find if you plot the recidivism rate among people who commit fraud, the line is much flatter,” Merryday said.

<p><em>SARASOTA</em> - Unmoved by Arthur Seaborne's age, his health concerns or the culture of corruption during the real estate boom, a federal judge sentenced the 70-year-old former mortgage broker to five years in prison.</p><p>It was the maximum sentence allowable under court guidelines.</p><p>U.S. District Court Judge Steven D. Merryday said he reached the decision because Seaborne's crimes against financial institutions and investors who attended his real estate seminars were “particularly cold-blooded.”</p><p>“You are a person — like many others I have seen — who is well-regulated in many areas of your life,” Merryday told Seaborne. “But in one area of your life you went terribly and unaccountably wrong, and you visited unconscionable injury on a quite a few of people.”</p><p>Charged with luring investors into a “no money down” home buying scheme and lying to federally insured lenders on loan applications, Seaborne became choked with tears when it was his turn to address the court.</p><p>“I'm truly, truly sorry for my actions,” he said.</p><p>Seaborne — one of the real estate professionals featured in 2009 Herald-Tribune investigation of property flipping — is one of nearly 30 real estate investors and professionals from Southwest Florida who have been sentenced to prison for crimes committed during the real estate boom.</p><p>His sentance was also one of the longest.</p><p>Only Rich Bobka — the chief lieutenant in a decade-long flipping fraud scheme masterminded by R. Craig Adams — and Bobka's brother, George Cavallo, have received longer sentences.</p><p>During Seaborne's Thursday morning hearing, his court-appointed attorney, Stephen Baer, tried to get his client's sentence reduced to three and a half years.</p><p>But federal prosecutors and two of Seaborne's victims objected to any reduction.</p><p>“I represent just one of the single, widowed and divorced women who were cheated and robbed of their nest eggs and led astray by Mr. Seaborne,” said Martha Huie, a Sarasota resident who invested with Seaborne during the boom. “He was the beginning of many sleepless nights and eroded finances for these people. Three and a half years is absurd for what he has done.”</p><p>Mark Winer, whose recently deceased mother also lost money investing with Seaborne, echoed Huie's sentiment.</p><p>“My mother suffered from a disease of the lower cortex of the brain — a semi-dementia,” Winer said. “She invested $70,000 to $100,000 with him and passed away in April because of the lost income. What he did caused her to go on welfare and Medicaid. She lost her home and her car. She did not live a very good life after she lost her life's savings.”</p><p>The Herald-Tribune's 2009 investigation found that Seaborne went out of his way to market his real estate investment program to women.</p><p>He told them he would buy houses in their names for no money down and take care of all the upkeep and expenses. They would get part of the rent money and share in the property's appreciation over time.</p><p>But when the economy turned, Seaborne stopped making the promised payments, forcing more than 30 of his investors to default on nearly $7 million in loans.</p><p>Seaborne's attorney tried to argue that a culture of corruption in the mortgage industry during the boom made it easy for his client to break the law.</p><p>Sales forces at banks “routinely used inflated and unverified borrower incomes and job titles to obtain approval of loans which borrowers actually did not qualify for and could not afford to repay,” Baer said in his sentencing memorandum.</p><p>But Merryday said the environment surrounding Seaborne's actions was not a legitimate argument for reducing his sentence.</p><p>“Just because other people are doing it is not a mitigating factor,” Merryday said. “If there was a misunderstanding about what the law said, that might be a mitigating factor. But the presence of others willing and able to commit fraud is just irrelevant. That sort of thing should cause us to question the health of our community.”</p><p>Merryday also dismissed Baer's argument that Seaborne should get his sentence reduced because there is a low rate of recidivism among 70-year-olds.</p><p>Maybe for drug dealers and burglars, Merryday said. But not for people who commit fraud.</p><p>“I think you'll find if you plot the recidivism rate among people who commit fraud, the line is much flatter,” Merryday said.</p>